Tag Archives: taxes

A Misapprehension

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This one is, surprisingly, on the part of The Wall Street Journal‘s editors. In an otherwise cogent editorial with several sound points regarding former President and Republican Party Presidential candidate Donald Trump’s offers of specially targeted tax cuts, the editors closed with this mistake:

Mr Trump is now proposing to narrow the base, so [tax] rates will have to be higher.

Not at all. Alternatively, and far more optimally, with a narrower tax base, spending will have to be lower. That’s universal, too. With reduced (tax) revenues for any reason, spending would need to be lower. With current government spending, in fact, even with flat revenues, spending badly wants reduction.

It seems the august editors have lost sight of the cause of our nation’s deficits and debt, the cause extant throughout our history.

Tax Deductions

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Progressive-Democrat Vice President and Party Presidential candidate Kamala Harris wants to expand the start-up business tax deduction from $5,000 to $50,000 [sic].

However, in typical Party duplicitous fashion, she gives with one hand and takes away far more with the other. She wants to raise taxes on us citizens and our businesses so much that that deduction increase would disappear in the flood.

  • Increase the corporate income tax rate from 21% to 28%
  • Increase the corporate alternative minimum tax introduced in the Inflation Reduction Act from 15% to 21%
  • Quadruple the stock buyback tax implemented in the Inflation Reduction Act from 1% to 4%
  • Make permanent the excess business loss limitation for pass-through businesses
  • Further limit the deductibility of employee compensation under Section 162(m) [currently limiting public companies’ tax deduction for compensation of covered executives to $1 million per individual]
  • Increase the global intangible low-taxed income tax rate from 10.5% to 21%, calculate the tax on a jurisdiction-by-jurisdiction basis, and revise related rules
  • Repeal the reduced tax rate on foreign-derived intangible income

How about cutting out the intrinsic contradictions of deductions here and tax rate increases there to pay for them? How about, instead, simply lowering tax rates across the board—begin, say, with a rate reduction equal in effect to the sum of all the subsidies and credits—Harris’ latest small business “deduction,” for instance and both Harris’ and Trump’s child tax credit, along with the myriad welfare subsidies?

Let the resultant vast growth in activity in the private economy pay for the tax rate decrease. The Jack Kennedy large tax rate deduction, the Reagan nearly as large tax rate reduction, and the Trump tax cuts all led to economic expansion that produced a net increase in revenues to the Federal government—all those cuts were paid for by the responding expanded economic activity.

But Progressive-Democrats are incapable even of saying the words “tax rate reduction.”

Wrong Response

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As usual. And as usual, the wrongness of the response is due to mischaracterizing the problem.

The Treasury Department on Thursday released 603 pages of proposed rules for the corporate alternative minimum tax, or CAMT, reaching a milestone in this exceptionally complex endeavor for regulators and corporate tax executives. The proposal comes more than two years after Congress passed the law creating the tax and more than 20 months after it took effect.

The rationalization is offered by the Biden-Harris’ Deputy Treasury Secretary Wally Adeyemo:

This is about tax fairness. The ability to use accountants and lawyers to reduce tax bills down to zero gives billion-dollar corporations a competitive advantage over smaller businesses.

They don’t understand what’s fair. Here’s what’s fair: make the problem irrelevant by simplifying the corporate tax code, rather than complexifying it, by reducing the corporate tax rate to that paid by those ill-treated small businesses. Even fairer, and not just for businesses, would be to reduce the corporate tax rate to zero for all businesses. That way, large corporations, with their accountants and lawyers, won’t have any “unfair” advantage over smaller businesses.

And there’d be no need to write 603 pages of regulation to implement a simple-sounding and wrong-headed tax rule. Which would reduce the need for all those Treasury bureaucrats whose jobs center on writing arcane, excessively complex regulations.

What She Said Then, What She Says Now

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News outlet writers are starting to object, however mildly, to Progressive-Democratic Party Presidential candidate Kamala Harris’ reluctance to do interviews and news conferences. Harris did do the one interview recently, with a friendly interviewer and while accompanied by her Comfort Running Mate, but that’s it. The press does have a beef about her apparent fear of sitting for unscripted interviews with objective interviewers—and doing them frequently and alone—and to have unscripted, free-wheeling news conferences of some duration and frequency where she wouldn’t know the questions in advance.

The press, though, couches their objections in the premise that without these interviews and news conferences, they won’t know what her platform is or what policies she intends to push were she elected.

Those of us outside the press, us less credulous average Americans, do know what her platform and policies are—Harris has told us quite clearly over the last several years, right up to mid-2024 when she supplanted Joe Biden as Party’s candidate.

Here is her platform made manifest, from what she has said and what she’s saying now, even if her remarks today are scattered about, and her remarks yesterday are being busily ignored by those same news outlet writers.

What She Said Then What She Says Now
There’s no question I’m in favor of banning fracking. I made that clear on the debate stage in 2020 that I would not ban fracking, as vice president I did not ban fracking, as president I will not ban fracking
“an undocumented immigrant is not a criminal”
And: once pledged to close all privately-run immigration detention centers “on day one” during her first presidential campaign		 Harris’ campaign manager: “I think at this point, you know, the policies that are, you know, having a real impact on ensuring that we have security and order at our border are policies that will continue”
January 2017 criticized t Obama’s refusal to veto a UN Security Council resolution on Israeli settlements. Israel has a right to defend itself, and how it does so matters.
I also expressed with the prime minister my serious concern about the scale of human suffering in Gaza…the images of dead children and desperate, hungry people fleeing for safety, sometimes displaced for the second, third, or fourth time.  We cannot look away in the face of these tragedies [not set at the feet of Hamas].
What She Said Then What She Still Says
Tax each stock and bond trade
Roll back 2017 tax cuts
Raise capital gains tax rates at the same rates as ordinary income		 Raise corporate taxes
Tax unrealized capital gains
4% “income-based premium” on households making more than $100,000 annually to pay for her version of “Medicare for All”
$10 trillion in public and private spending over 10 years to create millions of jobs and reduce greenhouse gas emissions		 Expand child tax credit and Earned Income Tax Credit, to be paid for by “there’s a great return on investment.”
Spending $25,000 via “tax credit” to cover the down payment costs for “first-time home buyers”

Do we believe her when she was saying what she believed, or do we believe her foxhole conversions of convenience today? I suggest, on the other hand, that where her positions today are substantially of those from yesterday, we certainly can take her at her word, and these are part of her clearly stated platform, also.

Here’s a Thought

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The article opens with this subheadline and lede:

There might be better ways to help low-income families than vastly expanding the child tax credit
The child tax credit is one of the few government entitlements that both political parties want to make more generous.

The problem with the child tax credit, though, is that rewards folks for not working—the credit is fully refundable, meaning that families get the full handout credit even if their income is lower than the credit.

My thought is this: switch to a low, flat income tax rate regardless of the source of income. That will leave more money in the hands of all American citizens—more than just the credit’s value—it’ll leave that money in our hands throughout the year, instead of our having to struggle through all twelve of the months of the current year, plus tax time, in order to get the money back in the following year (only a fraction of the credit is handed out in installments).

And it’ll encourage getting more work, or at the least reduce the government’s handout-induced discouragement of work, by leaving that erstwhile tax money in the hands of folks who work and pay taxes. Further, that erstwhile tax money already is coordinated [sic] with income; there’s no need to play games with indexing.

The problem with that, though, is strictly political. The move directly challenges the Progressive-Democratic Party’s addiction to constantly raising taxes. The move also would greatly reduce Party’s ability to curry favor and buy votes with credits and circuses’ handouts.